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Our Views: John Bel Edwards should sign the bill aimed at lowering sky-high car insurance rates

June 3, 2020

There are reasons, both philosophical and political, for Gov. John Bel Edwards to have problems with a sweeping bill aimed at stemming a plague of lawsuits that are a factor in driving up Louisiana’s sky-high car and truck insurance rates.

We urge the governor to sign the bill.

While the governor’s trial lawyer allies are strongly invested in today’s civil court system, it’s a mess. With processes, deadlines and courtroom restrictions favoring litigants, Louisiana is out of step with the rest of the country.

Senate Bill 418 by Sen. Kirk Talbot, R-River Ridge, will make technical changes long sought by the insurance industry and backed by Insurance Commissioner Jim Donelon. It’s unquestionably a pro-industry bill even if the particulars are technical in nature: allowing more jury trials in lawsuits, changing time frames for filing, and so on.Critics argue that it does not mandate any reduction in insurance rates. True enough, but we see lawsuit costs as a factor in high rates that can be mitigated by a civil justice system that looks more like that of a normal state. Donelon believes the bill will lower rates within a couple of years.

The Talbot bill would not immediately cure all that is wrong with car insurance rates, second-highest in the nation after Michigan. Reckless driving and poorly designed and maintained roads are far bigger issues. But the civil justice system is one cost driver that can be tackled now.

The governor’s politics are one thing, but the philosophical objection — that the rules changes in SB418 limit access to the courts — is we believe exaggerated.

In real life, any person who is seriously injured in a car wreck can get a day in court. What the Talbot changes will do is reduce the volume of quick “sue and settle” lawsuits for small sums that provide easy money for lawyers for plaintiffs.

Today’s system is not purely the fault of trial lawyers; insurers are complicit because they don’t want to litigate thousands of little claims, so they pay up, and judges don’t want to clog their dockets with such petty trials, so settlements are standard. The lawyers get a healthy percentage and the injured — whether real or just asserted — get a check for, say, $15,000. In a poor state, that’s a strong incentive.

It’s also an incentive that raises insurance rates for families and businesses.

The middle of a coronavirus pandemic is hardly the time for major changes in state law, but this issue was extensively debated last year and legislators are aware of the issues. We believe it’s time to give the industry-backed bill a chance to work but lawmakers should be open to tweaks and fixes in a couple of years as we gain more experience with the law.

The governor should give the Talbot bill a chance to work.